Mortgage Recast Calculator

250,000 balance at 5% over 20 remaining years, 30,000 lump sum: new balance 220,000, monthly payment drops from 1,650 to 1,452. Recasts reduce payment without refinancing — typically 250-500 fee. Term stays the same.

Run it with sensible defaults

Using current balance of 250,000, annual rate of 5%, years remaining of 20, lump sum of 30,000, the calculation works out to 1,451.90. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Current Balance, Annual Rate, Years Remaining, and Lump Sum — do not pull with equal force. Not every input has equal weight. Adjusting one input at a time toward extreme values shows which ones move the result most.

How the math works

Amortisation on reduced principal.

What the headline rate hides

Lenders quote a rate; what you pay is a blend of that rate, fees, insurance, and any early-repayment penalty built into the product. The figure here isolates the core interest cost so you can compare like-for-like across deals — then add the other costs separately before signing anything.

What this doesn't capture

The figure excludes arrangement fees, valuation costs, legal fees, insurance, and any early-repayment charges — those can add several thousand to the headline cost. Rate changes at renewal for fixed-term deals will shift the picture further. Use this for the core interest/principal math and add the other costs on top.

Related calculations worth running

Plans get firmer when you triangulate. Alongside this one, the mortgage calculator, the mortgage overpayment savings calculator, and the mortgage payment calculator tend to come up in the same conversations. Running two or three together exposes inconsistencies in any single assumption — which is usually where the useful insight lives.

Worked example

A borrower holds a mortgage of 300,000 at 4.5% interest with 18 years remaining. Their monthly payment is 1,843. They receive a bonus and decide to apply 50,000 toward the principal. After the recast, their balance falls to 250,000, and their monthly payment recalculates to 1,555. The term does not change, but the total interest paid over the remaining life of the loan reduces because each payment now applies to a smaller balance. A recast fee of 300–400 typically applies, paid once at the time of recast.

When this metric appears in conversations

• After a windfall or inheritance when a lump sum becomes available and the borrower wants relief from monthly outgoings without the cost and complexity of refinancing.
• When someone has paid down principal ahead of schedule and wants their payment adjusted to reflect the lower balance.
• In comparison with other options: refinancing to a lower rate, extending the term, or continuing with the original payment and shortening the loan duration instead.
• During financial planning discussions where monthly cash flow tightness is a constraint and reducing the payment is preferable to maintaining it.

What the result shows and does not show

This calculator models the new monthly payment amount after a lump sum is applied to principal. It shows how much the payment falls and illustrates interest savings if the payment remains that new amount for the full remaining term. It does not account for recast fees, any change in interest rate at future renewal dates, tax or regulatory implications, or the opportunity cost of deploying that lump sum elsewhere. The output is an arithmetic projection based on the inputs provided — it does not predict actual outcomes or guarantee those savings will be realised if circumstances change.

For educational illustration

This calculator is designed for educational exploration of how lump-sum payments and recasts affect monthly obligations and total interest cost. Results should be verified against loan documents and discussed with your lender before any financial decision is made.